Week in preview: Expect two big homebuilder earnings reports

Next week is all about the FOMC (Federal Open Market Committee) meeting

The FOMC meets on Tuesday and Wednesday, and we should have the announcement on Wednesday afternoon around 2:00 p.m. Taper? By how Much? Which securities? The Fed will also release its forecast of economic activity. The Fed has been consistently over-optimistic on economic growth, and it will be interesting to see how its forecasts stack up to the Street, which is decidedly more bearish. Aside from the FOMC meeting, we do have some important real estate–related data next week, with the NAHB homebuilder sentiment index, existing home sales, housing starts, building permits, and some manufacturing data.

For the mortgage REIT sector, there isn’t much to worry about this week. Non-agency REITs like Chimera (CIM) and PennyMac (PMT) will take note of the home price indices on Tuesday and maybe some of the general economic data. Agency REITs like Annaly (NLY) won’t care. Nothing releasing this week will affect any decision-making at the Fed.

Implications for homebuilders

Homebuilder earnings are back with Lennar (LEN) and KB Home (KBH), which are on November fiscal years. Last time around, the increase in interest rates was too recent to affect their quarters. We’ll see if traffic is starting to fall off as rates rise, particularly at the lower price points. Aside from the earnings reports, the builders will focus on the home price indices and the income numbers. The builders are probably not all that sensitive to quantitative easing, but they will take a close look at any changes to the Fed’s economic forecasts. Builders are highly cyclical stocks, and signs of economic weakness are negative for them.

To help us personalize your experience, which of the following best describes you?

Financial Adviser

Investment Professional

Individual Investor

What is the approximate total amount of the assets under your advisement?

Less than $25 million

$25 million to $99 million

$100 million to $499 million

$500 million or greater

What is the approximate amount of your firm's total assets under management (AUM), if applicable?

Less than $25 million

$25 million to $249 million

$250 million to $999 million

$1 billion to $9.99 billion

$10 billion or more

Don't know

Not applicable

What is your total amount of investable assets?

Less than $25,000

$25,000 to $99,999

$100,000 to $249,999

$250,000 to $999,999

$1 million or greater

Prefer not to say

Thank you!

x

There are no shortcuts to investing.

But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.

We think so too.

There are no shortcuts to investing. But if everyone had access to the trade secrets the top 10% of hedge fund managers use, their retirement path to wealth would be clearer. Enter your email address to discover how in our Market Realist Chronicles newsletter. You’ll receive must-know market insights straight from our former hedge fund manager, who managed $1 billion and made $2,000 an hour in the market, and his team of unbiased professional analysts.

Customize your experience.

Complete your registration by adding a password and customizing your Market Realist experience. You’ll quickly create a watch list to track the stocks and ETFs that matter most to you and your portfolio.